SOURCES OF FINANCE
If you are planning to build your home on your own there are several ways of financing a project:
- You are able to use your own savings (if so, you can probably stay in your existing home until the new one is built). Sometimes people are able to supplement their own savings by arranging an informal loan from family or friends.
- You sell your current house to raise the finance you need, or use your existing property as surety for a loan to fund the new house. If you have to sell your current home you might then live in a caravan on site, or with relatives, or rent a house while the new home is built.
- You borrow the money you need by taking out a mortgage on your proposed self build home. Usually you can only borrow about 75% of the land cost, and 60% of the build cost, so you will still need a sizeable deposit. Our MEMBERS DIRECTORY lists financial/mortgage providers.
You need to assess your situation and work out which method or combination of methods will work best for you.
An up-to-date list of self build mortgage providers can be found here: list of self build mortgage suppliers.
Community-led housing schemes are eligible for grants towards some professional fees. Locality has more information.
Some of the bigger lending institutions may also be worth approaching, though in the current economic climate; it’s very difficult to get finance for group self build schemes.
Budgeting can make or break a project. The more accurate your estimates, and calculations, the more likely you will build your dream home without any crippling over spends. See our BUDGET ADVICE page for things to keep in mind.
The Government has confirmed that self builders (and the clients of custom builders) will be exempt from paying the Community Infrastructure Levy (CIL) that is normally charged when planning permission is granted for a new house. But you must follow process, and it is time sensitive. It has also confirmed plans to exempt self builders from paying Section 106 (S106) Affordable Housing Contributions, although this has been challenged and seems to be in a constant state of flux.
More detail on these topics is available on our dedicated CIL/S106 EXEMPTIONS page.